Blanch: There's valid concern about surplus, but no catastrophic scenario

Oil Market Overview - The oil market is experiencing a rebound due to a more modest increase in supply than previously feared, with OPEC considering a return of 1.6 million barrels per day over the next three months [1][2] - Concerns about oversupply are prevalent, particularly with significant volumes coming from non-OPEC countries like Guyana, Brazil, and Canada [4][5] - OPEC plans to ramp up capacity to 4 million barrels per day, but only 70-75% of the initial announced uplift has materialized [5] Demand and Supply Dynamics - The surplus in oil is primarily occurring in China's strategic storage, leading to bearish sentiments in the market [6] - Demand is expected to remain healthy, with forecasts indicating a drop in non-OPEC supply from 1.2 million barrels per day this year to 0.5 million next year [7] - An inventory build is currently observed in China, which is expected to continue throughout the winter [8] Future Price Projections - The average oil price is projected to decline to around $60-$61 per barrel for the quarter, with a more balanced market anticipated in the second half of 2026 and into 2027 [6][9] - Prices are expected to average over $70 per barrel in the latter half of 2026 and into 2027 as the market stabilizes [9]